Correlation Between PT Astra and NICK Old

Can any of the company-specific risk be diversified away by investing in both PT Astra and NICK Old at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PT Astra and NICK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Astra International and NICK Old, you can compare the effects of market volatilities on PT Astra and NICK Old and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PT Astra with a short position of NICK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and NICK Old.

Diversification Opportunities for PT Astra and NICK Old

0.0

Correlation Coefficient

PT Astra  NICK Old

Pay attention - limited upside

The 3 months correlation between PTAIF and NICK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and NICK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICK Old and PT Astra is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PT Astra International are associated (or correlated) with NICK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICK Old has no effect on the direction of PT Astra i.e., PT Astra and NICK Old go up and down completely randomly.

Pair Corralation between PT Astra and NICK Old

If you would invest  27.00  in PT Astra International on December 29, 2024 and sell it today you would earn a total of  1.00  from holding PT Astra International or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PT Astra International  vs.  NICK Old

PT Astra International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Astra International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, PT Astra may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NICK Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NICK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, NICK Old is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PT Astra and NICK Old

The main advantage of trading using opposite PT Astra and NICK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, NICK Old can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NICK Old will offset losses from the drop in NICK Old's long position.

The idea behind PT Astra International and NICK Old pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.